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Feds shutdown sweepstakes scam targeting seniors

Created date

June 24th, 2015
scam alert graphic
scam alert graphic

Who doesn’t want to win a contest—especially when the prize is $2 million? Beware—just because you receive a notification that you have won something doesn’t necessarily mean you have—especially if that notice comes from a scam artist. 

The Federal Trade Commission (FTC) recently shut down an alleged international scam operation based in Fort Lauderdale, Fla. What makes this scam particularly heartless is that the scammers were apparently targeting older people. 

The victims received official-looking letters saying they had won $2 million. In order to collect their prize, however, they had to mail a $20-$30 fee in cash, check, or money order to the scammers. They also had to act fast. If payment wasn’t received before the “deadline,” winnings would be forfeited. 

Millions lost

“This outfit promised people huge prizes and collected millions in fees but never paid out a dime,” says Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “If someone says you have to pay to claim a sweepstakes prize, assume it’s a scam.”

In fact, there was no contest. The FTC says  “dense, confusing language, at the bottom or on the back of the letters,” revealed that the true nature of the communication was to sell consumers “reports” of existing contests and sweepstakes. The FTC says that the operation deliberately deceived thousands and estimates that the scammers collected over $25 million. 

Four arrests have been made in connection with this case. “No one is permitted to steal hard-earned money from members of our community,” says U.S. Attorney Wifredo A. Ferrer. “This office will work with international, national, and local law enforcement agencies to prevent these types of sweepstake fraud schemes, and we will bring those who commit these crimes to justice.”

Legitimate sweepstakes are free and by chance. The FTC offers these suggestions on how to spot a sweepstakes scam:

Never pay to collect a prize. Whatever they say the money is for—taxes, shipping and handling charges, or processing fees—don’t believe them. Don’t send money or give them your checking account or credit card number.

Your “notice” was mailed by bulk rate. It’s not likely you’ve won a big prize if your notification was mailed by bulk rate. Other people got the same notice, too. Check the postmark on the envelope or postcard. 

Don’t let yourself be rushed. Scammers will tell you to act now or you’ll miss out. Take your time and talk to someone you trust before you do anything.

Tell people you know about it. By talking about scams, you might help someone you care about avoid falling for one.

Tell the FTC about it. Report scams at ftc.gov/complaint or 1-877-FTC-HELP. Your report makes a difference and could help make losers out of scam artists running bogus sweepstakes.

 

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